The idiots who have been saying that inflation is our main worry got out of the bond market a couple of months ago. They assumed yields on Treasuries would climb (and prices fall) as all the new issues to fund the stimulus flooded the market. They looked pretty dumb this week as per Vince Farrell.
The Treasury’s auction of ten-year bonds was very successful and quite a surprise. The yield was 3.37%, and this bond traded at 3.50% just two weeks ago. The bid-to-cover ratio was a very strong 3.28 times, and the last few auctions of ten-year debt averaged 2.42 times. Indirect buyers, mostly foreign, were 43.9% of the total against a recent average of 27.8%.
U.S. Treasuries are still the investment of choice for those looking for a safe harbor. As the chart at the top shows, yields across the curve are lower than last year and last week. Yes gas is more expensive because the dollar is weak, but the overcapacity of so many sectors is making inflation the least of our problems.
Categories: Business · Economics · Inflation · Wall Street
Tagged: Bond Market, deflation, Inflation, Vince Farrell
The North Koreans are really getting desperate. After threatening to launch a missile towards Hawaii–which got zero response from Obama–they now seem engaged in a cyber-attack on the Pentagon and the New York Stock Exchange.
North Korean hackers are suspected of launching a cyber-attack on some of the most important government offices in the US and South Korea in recent days, including the White House, the Pentagon, the New York Stock Exchange and the presidential Blue House in Seoul.
Although they temporarily crashed a few South Korean websites, the attacks on U.S. institutions were as feckless as their threatened missile launch. They just hate it when we ignore them.
Categories: Defense Policy · Technology
Tagged: Cyber Warfare, North Korea
Robert McNamara’s passing reminds us that “the best and brightest” often are the most tragic characters in the Shakespearean world of politics. To read Tim Weiner’s magnificent obituary is to understand the depth of that tragedy.
The war became his personal nightmare. Nothing he did, none of the tools at his command — the power of American weapons, the forces of technology and logic, or the strength of American soldiers — could stop the armies of North Vietnam and their South Vietnamese allies, the Vietcong. He concluded well before leaving the Pentagon that the war was futile, but he did not share that insight with the public until late in life.
McNamara had gotten his reputation for a “right-sizing” turnaround at the Ford Motor Company. I am sure that when Jack Kennedy brought him into the Pentagon, he was thinking the same techniques could be applied to the bloated bureaucracy of the Defense Department. But like the Soviet Nomenklatura, the beast could not be tamed and then the senseless War in Vietnam made cutting budgets impossible. By the end of his term, defense budgets had doubled. The Cost of Empire was never to come down again.
Will the tragedy of the Military Industrial Complex bloated influence continue to haunt us and our children for another generation?
Categories: Barack Obama · Defense Policy · Military Spending
Tagged: Military Industrial Complex, Robert McNamara
Since the beginning of this blog, I have been concerned about the scourge of methamphetamine on our land. Now Nick Redding has written and important book, Methland: The Death and Life of an American Small Town
, which details the plague as it effects one town in Iowa. Walter Kirn’s amazing review details the damage.
The ravages of meth, or “crank,” on Oelwein and countless forsaken locales much like it are shown to be merely superficial symptoms of a vaster social dementia caused by, among other things, the iron dominion of corporate agriculture and the slow melting of villages and families into the worldwide financial stew.
Meth is actually the perfect drug for this moment, supplying chemical optimism until we crash. But the moniker “Hillybilly Heroin” is not correct, because it’s really working class cocaine. Keep reading →
Categories: Corruption · Health care · Justice · Wall Street
Tagged: Books, Cocaine, Meth amphetamine, Methland, Nick Redding, Walter Kirn
The word most used to describe Palin’s press conference yesterday was “breathless”. She sped through her little speech like a student with too much Adderal in her system. Last night at a dinner party the theories ranged between two poles. On one side was the thought that the emails about to come out in one of the corruption lawsuits would be truly embarrassing. On the other pole is the theory that her speakers agent has told her how much money she could earn in the next 18 months if she wasn’t tied to the Alaska Governor’s mansion, and the thought of making a killing while she was still in her Andy Warhol “15 minutes” was too much for her and Todd to pass up.
Either way, despite the hopes of Bill Kristol, the whole resignation speech didn’t do her a bit of good. She just seems like one more nutty, impulsive Republican governor. Mitt Romney is enjoying his breakfast this morning.
Categories: Politics · Sarah Palin
Tagged: Mitt Romney, Politics, Republican Party, Sarah Palin
Chris Anderson, the Editor of Wired Magazine, who has made a mint stating the obvious (The Long Tail
), has a new book Free: The Future of a Radical Price
, which will cost you $27 bucks to absorb his faux-wisdom. Fortunately, you can save yourself some money and time by reading Malcolm Gladwell’s biting review in The New Yorker.
“Free” is essentially an extended elaboration of Stewart Brand’s famous declaration that “information wants to be free.” The digital age, Anderson argues, is exerting an inexorable downward pressure on the prices of all things “made of ideas.” Anderson does not consider this a passing trend. Rather, he seems to think of it as an iron law: “In the digital realm you can try to keep Free at bay with laws and locks, but eventually the force of economic gravity will win.” To musicians who believe that their music is being pirated, Anderson is blunt. They should stop complaining, and capitalize on the added exposure that piracy provides by making money through touring, merchandise sales, and “yes, the sale of some of [their] music to people who still want CDs or prefer to buy their music online.”
As I have said before, I know a great many musicians in their 60’s and 70’s with a lifetime of recorded music that is being devalued by Anderson’s ethos and attitude. While he’s out giving $30,000 lectures on “Free” , they are facing bankruptcy because of health costs. It is little comfort that this smart-ass tells them to go out and tour. Obviously we have been trying to counter this nonsense on this blog for a while, but Gladwell has a great platform to debunk Anderson’s hypocritical claims (he sells his books and doesn’t give away Wired Magazine).
It would be nice to know, as well, just how a business goes about reorganizing itself around getting people to work for “non-monetary rewards.” Does he mean that the New York Timesshould be staffed by volunteers, like Meals on Wheels? Anderson’s reference to people who “prefer to buy their music online” carries the faint suggestion that refraining from theft should be considered a mere preference. And then there is his insistence that the relentless downward pressure on prices represents an iron law of the digital economy. Why is it a law? Free is just another price, and prices are set by individual actors, in accordance with the aggregated particulars of marketplace power. “Information wants to be free,” Anderson tells us, “in the same way that life wants to spread and water wants to run downhill.” But information can’t actually want anything, can it? Amazon wants the information in the Dallas paper to be free, because that way Amazon makes more money. Why are the self-interested motives of powerful companies being elevated to a philosophical principle?
The “Free Economy” has certainly benefited Google and a few other powerful corporations. I’d be hard put to find a single artist it has helped. Maybe Anderson should donate all his book royalties to The Blues Foundation.
Categories: Business · Entertainment · Music · Technology
Tagged: Chris Anderson, Free:The Future of a Radical Price, Malcolm Gladwell, The Long Tail, The New Yorker
The Pew Center for Media surveyed the Cable TV networks last week.
Fully 93% of cable coverage studied on the Thursday and Friday following his death was about the King of Pop.
Were not talking about Entertainment Tonight here–this is CNN, MSNBC, Fox News they are measuring.The TV News executives are so attuned to the Hive Mind that if they stopped feeding Michael Jackson news and started reporting Iran, the hive mind would tune to another channel. Bill Wasik (Flash Mobs) talked about this to Salon a couple of weeks ago.
Instead, it’s like this giant hive mind will pluck out something that you’ve done and say, this we love, this we bestow the pleasure of 2 million hits on. From there on out, you’re going to use those cues you get from this giant machine to tell you what to keep doing and to tell you what to stop doing. And that to me is potentially scary in all sorts of ways. The hive mind selects for a certain kind of thing, it selects for culture that is instantly digestible, it selects for culture that is sensational in a certain sort of way.
If all news and all culture has to be sensational, then we’re fucked.
I’m going out in the woods to take a long quiet walk.
Categories: Entertainment · Journalism
Tagged: CNN, Fox News, Journalism, Media, Michael Jackson, MSNBC
OK, so Bernie Madoff will spend the rest of his life in jail. But the question of what happened to the money still remains.
The central problem being played out among Madoff victims is that only a small fraction of the nearly $65 billion that disappeared has been recovered.
So he didn’t earn 10% a year on the invested money with some fantastic stock picking skill. Even if he had left it in a money market account earning 2%, it wouldn’t explain how most of the $65 billion has disappeared, unless as I speculated in January it was just a money laundering operation for some very bad people who made sure they got whole.
Categories: Corruption · Wall Street
Tagged: Bernie Madoff, Money Laundering
General Electric’s CEO Jeff Immelt gave a speech in Detroit on Friday announcing a new manufacturing plant. What he said went beyond the usual corporate-speak into the realm of essential truth.
Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a services-led, consumption-based economy – and somehow still expect to prosper. That idea was flat wrong. And what did we get in the bargain? We’ve seen a great vanishing of wealth. Our competitive edge has slipped away, and this has hit the middle class hard.
As a nation, we’ve been consuming more than we earn, saved too little and taken on far too much debt. Growth in research and development has slowed. Our country has made too little progress on some of the defining challenges of our time – like clean energy and affordable health care. Our budget and trade deficits have reached levels that are clearly not sustainable…
Recently my colleague Peter Loescher, the CEO of Siemens, extolled the importance of Germany as an exporting country. In my career, I have never heard an American CEO say that the United States should be leading in exports. Well, I am saying it today: This country ought to be, and we can be, not just the world’s leading market but a leading exporter as well.
As I have been saying, the consumer economy will not rescue us from this crisis. We have to become an export power again. And this transition has to come soon. Bob Herbert pointed this morning to a shocking study on labor underutilization (unemployed+part time employed+given up looking for a job).
“By May 2009,” according to the Center for Labor Market Studies at Northeastern University in Boston, “the total number of underutilized workers had increased dramatically from 15.63 million to 29.37 million — a rise of 13.7 million, or 88 percent. Nearly 30 million working-age individuals were underutilized in May 2009, the largest number in our nation’s history. The overall labor underutilization rate in May 2009 had risen to 18.2 percent, its highest value in 26 years.”
If a year from now we still have 30 million underutilized workers the civil unrest could be exploited by demagogues of the right and the left. Take your pick. It could get ugly.
Categories: Business · Economics · Innovation · civil unrest
Tagged: Exports, General Electric, hidden unemployment, Jeff Immelt, Labor underutilization, Unemployment
